Nigeria to Keep Oil Production Steady at 2.4mbpd in 2013

Nigeria’s current oil production of 2.4 million barrels per day (mbpd) is expected to remain at steady at that level this year, Group Executive Director (GED), in charge of Exploration and Production at the Nigerian National Petroleum Corporation (NNPC), Mr. Abiye Membere has said.

Insecurity in the Niger Delta region hampers efforts to increase output, Dow Jones Newswires reported Thursday.
Membere, who spoke at the ongoing Nigerian Oil and Gas (NOG) conference in Abuja, said while oil supply would remain static, plans were in place to increase the country’s gas output for domestic use.
“The plan is to ensure we hold the country’s production at 2.4 to 2.5 million barrels a day average for the year,” Membere said.
However, Chief Executives of the International Oil Companies (IOCs) warned of the significant challenges the country faces even to maintain production at its current level.
Managing Director of Mobil Producing Nigeria Unlimited, Mr. Mark Ward, said at the conference that Nigeria must ensure that its fiscal packages yielded fair returns on investments.

“There is a significant amount of competition for capital that’s linked to the African continent and other places,” Dow Jones quoted Ward to have said. It’s important that it’s calibrated properly,” Ward added.
In his presentation, Managing Director of the Shell Petroleum Development Company of Nigeria Limited, (SPDC), Mr. Mutiu Sunmonu, had stated that uncertainty over the Petroleum Industry Bill (PIB) was preventing the company from making significant offshore, deepwater investments.

But as the older players complain that difficulty finding funding and an uncertain regulatory environment are discouraging them from investing, Addax Petroleum, a subsidiary of China’s Sinopec Group is seeking to aggressively grow its portfolio in Nigeria.
Managing Director of the company, Cornelis Zegelaar, who spoke at the NOG conference, said Addax was hoping to make fresh investments in Nigeria, one of the most important and the biggest oil producers.
He added: “I have been promised that if the projects are there, then the money will be there so I have less of a funding problem than some of my colleagues.”

Sinopec last year bought Total SA’s 20 percent stake and operating mandate in its Nigerian offshore block, OML 138, for $2.5 billion.
But worried about the menace of crude oil theft, the IOCs are calling for increased determination on how to curb oil theft.
While offering possible solutions to the threat of crude oil theft, managing directors of leading oil and gas companies in the country such as Shell Petroleum Development Company (SPDC), ExxonMobil and Chevron Nigeria Limited (CNL) amongst others noted that one single approach or mechanism to curtail crude oil theft may not guarantee expected results to Nigeria.

In their respective presentations at the NOG conference, the industry chieftains explained that the business of stealing Nigeria’s crude oil has advanced into an organised large-scale enterprise leading to the loss of over $6 billion annual revenue due to Nigeria.
They stated that the fight against such crime would require approaches such as increased public enlightenment on the consequences of the illicit trade.
Sunmonu also said: “The war against crude theft is no longer a war against the poor people of the Niger Delta; it is a war against the big fishes.
The finger print tracing which the Federal Government has decided to adopt as part of efforts to end crude oil theft is a crucial step but we still need to apply other strategies. We need strategies to engender some sense of outrage so that all Nigerians can see crude theft as crime against humanity and the environment and begin to condemn it.”

Sunmonu also asked the government to seek means of making access to oil pipelines extremely difficult to oil thieves, adding that SPDC has recently resorted to burying its pipelines at 13.5ft into the ground as way of making it hard for vandals to access
“The war against crude oil theft is a war against principalities and powers and we need to also make it harder for them because I don’t think one solution is OK; government has to look for multidimensional strategies to end this challenge
On his part, Ward advised the government to consider widespread poverty amongst host communities, adding that such remained a major factor to increasing level of crude oil theft.
He explained that: “Government should focus on developing human capacities in host communities. Poverty plays a major role in encouraging bunkering because the communities feel left out.”

In agreement, the Chief of Naval Staff (CNS), Vice Admiral Joseph Ezeoba, has stated that poverty, high cost and chronic scarcity of refined petroleum products are the reasons for state insecurity, increasing illegalities and oil thefts in the Niger Delta region.
Ezeoba disclosed this yesterday in Abuja at meeting of stakeholders in the Oil and Gas sector aimed to seek ways of reducing incidences of crude oil theft and other associated crimes in the Nigerian maritime sector.

He said oil bunkering and other related crimes have given the country negative image among the community of nations, warning that cases of crude oil theft, pipeline vandalism, piracy and militancy poses threat to our national security and economic survival.
“The high cost and chronic scarcity of refined products combined with poverty has resulted in proliferation of numerous illegal micro refineries in the Niger Delta. This situation continues to provide incentives to crude oil thieves and pipeline vandals.”

In the same vein, the Minister of State for Defence, Mrs. Olusola Obada, said the fact that crude oil theft, pipeline vandalism and piracy have become a menace to the national economy is good reason why all the stakeholders should be on the same page.
Meanwhile, the House of Representatives, House Committee on Environment yesterday ordered the Pipelines and Product Marketing Company (PPMC) Limited, a subsidiary of the Nigerian National Petroleum Corporation (NNPC) to compensate the seven communities affected by spill activities in Delta and Edo States with the sum of N640million.

The PPMC has also been directed to pay the sum of N7million as cumulative default fees to the Federal Government through the National Oil Spill Detection and Response Agency (NOSDRA) as stipulated by the extant NOSDRA Act.
The petition stated that the seven communities suffered massive oil spillages resulting from equipment failures, specifically corrosion of the Pipelines pipes and delayed testing and replacement of PPMC/NNPC safety equipments.
The affected communities are Ibihie-Idoha, Agbede, Okpella, Auchi, Oviri-Okpe, Asagbami and Amuokpokpo spread across the two states.

A statement issued by the office of the Chairman, House Committee on Environment, Hon. Uche Ekwunife, said the Committee was saddled with the responsibility of ensuring that operators, regulators and other relevant stakeholders involved in the exploitation, exploration, usage and management of environmental resources abide by the rules.
Ekwunife pointed that the Committee was working assiduously to ensure that all agencies saddled with oil pollution conformed to global best practices in carrying out their duties to minimise and possibly abate measures that would severely impact on the environment or impair the health of the people.

“Oil spill incidents which have reduced significantly in other parts of the world have acquired a rather frightening regularity in our nation. Our people suffer the effects of these spills for so long because the situations are usually not approached holistically.
“Hence, the re-current divergent views between government agencies and the oil spillers. The most worrisome dimension in all these is the issue of compensation for loss of income and economic damages resulting from pollution and of course the long-term goal of ecological restoration. It is sad to note that non-payment of compensations linger for years unattended to in our nation.

“In some other countries, whenever oil spill occurs and the cause is established, necessary clean-ups, appropriate remediation and adequate compensations are carried out immediately. It is incomprehensible to imagine that the issue before us today has lingered since 2006. The underlying assumption is that either nothing has happened to these affected communities or that the fate of these communities is being toyed with by the oil companies”, Ekwunife said.

The Director General of NOSDRA, Mr. Peter Idabor, said in pursuit of the communities’ claims, NOSDRA had participated in a joint investigation visit conducted by PPMC.
He said at the instance of PPMC, NOSDRA appointed an independent valuer to appraise the extent of damages suffered by the respective communities and had made recommendations which included immediate clean-up, remediation and payment of N640 million as compensation to the communities.

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